The market appears to be recovering from the annual September pullbacks, as we can see with the S&P 500.
Following the recent declines, price found support at $4305 on September 20th and then it looked as though the pullback was over. But after failing at the resistance zone consisting of the 20 & 50 simple moving averages, price declined again, but this time slightly lower than the previous low.
Price then moved up and declined once more but not as low as its previous low, forming an inverted head & shoulders chart pattern. This pattern is an early indication of a potential trend continuation.
Following this chart pattern, we can now see that price has continued to move to the upside and is currently just 9 points away from breaking the all-time high.
A break and close above this level will confirm a trend continuation, and this should be followed by strong moves across the board in both the UK and US markets.
We tend to see new trends emerge from October/November, so be on the lookout or new stocks appearing in our community and our weekly newsletter.
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